New Study Finds Durbin-Marshall Credit Card Price Controls Will Harm Low-Income Consumers

November 1, 2023 | The Committee to Unleash Prosperity

Committee to Unleash Prosperity Study Shows How Proposed Credit Card Routing Mandates Will Hurt Low-Income Americans

WASHINGTON, DC — On Tuesday, the Committee to Unleash Prosperity co-founder Stephen Moore released a new st udy showing how credit card routing mandates proposed by Senators Dick Durbin and Roger Marshall would disproportionately harm low-income Americans.

The study found that similar debit and credit routing mandates caused low-income earners to lose access to credit and credit card benefits, including a reduction in valuable credit card rewards, like cash back. In addition, the study notes that, historically, the vast majority of retailers and merchants did not pass on savings from price caps on debit and credit interchange to consumers.

You can read Moore’s statement below or view the full study HERE.

Durbin Credit Card Price Controls Will Harm Lower-Income Consumers

A new study by the Committee to Unleash Prosperity finds that Illinois Senator Dick Durbin’s credit card bill to use routing mandates to impose price controls on “interchange fees” will wind up hurting consumers.

The study also exposes the negative effects of the interchange price controls:

Where credit/debit cards have been tried in 47 countries, the evidence shows that consumers are harmed by a lack of access to cards and a loss of benefits from credit cards, such as limitations of popular “reward programs.”
Credit card price controls limit the ability of lower-income Americans to have access to credit cards – as firms respond to price controls by restricting cards issued to poorer and less creditworthy applicants.
Credit card price controls will NOT lower prices for consumers. Studies have shown that when fees are restricted by government regulations, about 70% of the savings go to the merchants, while consumers get little benefit at the cash register.

Why are a handful of Republican senators getting in bed with Durbin on this flawed bill?